Third Party Control Account Segment Qualifier

Use of Third Party Control Account Segment

Qualifier
Author - Venkat Srinivasan
Company TransSys Solutions
Oracle Application Version - Applies to R12

Case Study Overview

This case study briefly discusses about,

The basic GL setup steps required for enabling and using Third Party Control Account
feature
The purpose of this Third Party Control Account functionality
The usage of this Third Party Control Account functionality

Feature & Requirement

The Global Accounting Engine (AX) was a separate ledger in 11i but in release R12 it became an
integral part of the accounting suite. The Third Party Control Account qualifier existed but it was
blank by default on a new installation which made R12 behave same like 11i
This feature can be used to control the entry of manual journals relating to subledger control
accounts directly in General Ledger module which should otherwise come only from subledgers
(Payables and Receivables).
This feature will help in easy reconciliation of subledger control accounts balances with the
General Ledger balances

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Third Party Control Account Segment Qualifier

Functionality Details

We all know that the typical segment qualifiers are:

All Budgeting values are YES or NO

Allow Posting values are YES or NO
Account Type values are Asset, Liability, Revenue, Expense and Ownership / Stockholders
Equity

Now in R12, additionally two more segment qualifiers as below have been introduced. We will learn more
about Third Party Control account FEATURE in this document.

Reconcile values are YES or NO

Third Party Control Account values are:
 Yes
 No
 Customer
 Supplier
 Restrict Manual Journals (this was introduced in R12.1.3)

Fig 1: Segment Qualifiers Window

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Third Party Control Account Segment Qualifier

What is this third party control account and for what purpose we can use this functionality?

Third Party Control Account: Control accounts are General Ledger accounts that are accessed from
subledgers (Oracle Payables and Receivables modules) for which the Global Accounting Engine
automatically creates detailed balances. The control account segment qualifier lets you indicate
which account segment values represent control accounts.

The Third Party Control Account feature in the Oracle E-Business Suite enables organizations to
maintain detailed balances by third party for an account code combination. Subledger Accounting
checks that valid third party information is associated with the journal line if the account code
combination is a Third Party Control Account. If it is not, then Subledger Accounting rejects the
journal line.

Using this Third Party Control Account functionality, we can prevent the entry of manual Journals in
GL. Journal entries can only be created via the SLA architecture from a subledger. Currently the
only subledgers that support these accounts are: Payables and Receivables.

What values to be set for the Third Party Control Account segment qualifier?

You can enter Customer or Supplier or Yes for the Third Party Control Account to designate the
account as a Control Account. Access to this account will be restricted to Oracle Receivables and
Payables for which the Global Accounting Engine automatically creates detailed balances.

GL will only accept a journal entry line that is entered against a third party control account if it
comes from SLA. This validation is performed in the manual journal entry form.

When do we use the value Restrict Manual Journals?

The users might sometimes want to define an account code as a Third Party Control Account to
prevent the GL manual journal entries from posting to these accounts. When such accounts are
used in the subledger transaction without the third party information, Subledger Accounting
prevents the accounting for such transaction with an error that the third party information is
missing.
Ex. when the Unidentified Receipts account code in the Oracle Receivables is defined as a Third
Party Control Account, accounting for the unidentified receipts will fail because no third party
information is available for such receipts. Similar issues will be observed with the rounding account
and intercompany accounts.

The Restrict Manual Journals value can be used which provides validation that allows subledger
accounting to complete successfully without the third party information in the subledgers but to
restrict that account code while entering in the GL manual journal entries.
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Third Party Control Account Segment Qualifier

We can use this value, when the need is to define an account code as a Third Party Control Account
for the only purpose of preventing the GL manual journal entries from posting to these accounts
then the user needs to select the value Restrict Manual Journals in the list of values for the Third
Party Control Account segment qualifier in the accounting flexfield segment value definition form

Note: After the setting up an account code as Restrict Manual Journals Third Party Control Account, we
need to run the concurrent program Inherit Segment Value Attributes to reflect the Third Party Control
Account qualifier changes in the account code combinations.

Fig 2: Segment values window

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Third Party Control Account Segment Qualifier

Fig 3: Journal Entry window

References (MY ORACLE SUPPORT):

 How to Setup The Third Party Control Account In R12 [ID 431186.1]
 12.1.3 New Feature: Enhanced Third Party Control Account Validations [ID 1221605.1]


What Subledgers Are Supported For Third Party Control Accounts? [ID 736255.1]

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